Cable One - NBC Flap

1/20/06 – As in a blue screen, when viewers in Prescott, Page, Cottonwood, the White Mountains and Winslow tune into channel 2 or channel 12. On the screen, instead of the Tonight Show or local news, Phoenix-based Cable One offers a simple printed message. Julie Laulis, vice president of operations for Cable One's southwest division, summarizes.

We do believe that free TV should be free, we see this as just the tip of the iceberg, if nobody else is getting paid for programming that they deliver, if one starts then how many others will follow behind

Cable One's retransmission agreement with KPNX expired January 1st. The broadcaster is now asking for less than a penny a day for each of Cable One's 60 thousand subscribers. Laulis says Cable One has no problem paying cable stations like ESPN and CNN for their programming. But she says the company shouldn't have to pay local broadcasters, who are given free spectrum by the federal government.

Their signal is available free over the air, we don't pay broadcasters, we haven't paid broadcasters in the past. We're willing to talk, but cash for programming, not taking into account the benefit of our distribution is not something that we think is fair and right.

But John Misner, general manager of KPNX in Phoenix and KNAZ in Flagstaff, says he's offered Cable One a fair deal.

We've been asking for a penny a day per subscriber, that's a figure that Cable One publicized, and we confirmed. We think that's fair market value for the programming that we go to great expense to produce and broadcast, since we've publicized the penny a day, we've actually reduced that requirement in an effort to keep channel 12 and channel 2 on Cable One, but so far Cable One has not responded with a counter offer.

Every three years commercial television stations must choose whether to require a cable or satellite TV company to carry its signal that's known as a must-carry agreement. Or, like KPNX, they can choose to negotiate a retransmission consent agreement. Misner has signed agreements with 13 of the 14 cable companies in the Phoenix-Prescott market, and both satellite companies. Cable One, he says, is the only exception.

I was shocked and surprised we left their air, knowing as I sat here finalizing our agreements with the other cable companies, that we got 13 of the agreements finalized, I was surprised cable one chose to head in the direction they did.

Cable One says it's never paid cash to a broadcaster for programming. John Craft, a Journalism professor at Arizona State University in Phoenix, says that's not unusual. He says most cable companies have compensated broadcasters in other ways.

they are getting in kind service, they're getting a second channel Channel 3 in this market for example runs channel 14 on the cable or perhaps, channel 15 in this market had a deal where all their employees get free cable TV, so there's those kinds of payments they've worked deals with the cable systems for something that doesn't cost the cable system very much money, but instead gives them something in return for their signal

Craft says it's also possible KPNX in the past simply never asked Cable One for anything in return for their signal, because the company operates in smaller markets. Whatever the case, the current stalemate comes at an inopportune time for fans of this international sporting event.

Post Olympic theme music for a few seconds

The Olympics begin in three weeks on NBC. While coverage will be available on the network's cable channels such as CNBC and MSNBC, the most popular events, like figure skating and downhill skiing, will only be shown primetime on channel 12.